Well 2016 Christmas Selling Season is Behind us. Your sales were probably
huge for the past two months -but don't despair, January and February are
usually pretty good months also. See our third article to learn why and how
you can take advantage of this scenario.

In my last newsletter, I suggested you use January and February to get rid
of non-performing inventory and to tune up your listings. The one thing I
forgot to mention in that article is that, I use most of the first quarter
to find new products and wholesale sources.

It just so turns out that, the 1st quarter of every year is one
of the busiest times of the year for wholesale trade shows. These trade
shows are my number one source of new suppliers and new merchandise to
sell. This week I am attending the Seattle Gift Show, and in March, I will
be attending the ASD Wholesale trade show in Las Vegas. See the next item
for some upcoming gift shows around the country.

Wholesale Gift Shows coming up in January - March. Just Google the name of
the show for information and registration website. If this is your first
wholesale trade show, see my article on
how to gain admission to trade shows
in the last issue of this newsletter.

Atlanta Gift Shoe Jan 10 to 14

Dallas Gift Show January 18-24

Las Vegas Gift Show - January 22-26

Surf Expo - Orlando - Jan 26-28

Windy City Gift Show (Chicago) - Jan 29-31

CTGA Gift Show - Ontario, Canada - Jan 29 - Feb 4th.

NY Now - Wholesale Trade show at Javit's Center, New York City - Feb 5-8th.

Las Angeles Winter Market - Feb 17 to 20th.

New York Toy Fair - Fed 18-21

ASD Market Week - March 19-22

Mother's Day this year is May 14th, 2017. If you are using
Amazon fulfillment, now is the time to order merchandise and get it off to
FBA so it arrives in time. Mother's Day shopping typically starts in early
March. If you are merchant fulfilling or selling on eBay then you can wait
a couple weeks to order goods (assuming, your supplier can deliver in 4
weeks). If you are ordering from China, everything is closed until Feb 2 nd for Chinese New Years. So if you plan to get goods in time
for Mother's Day -you will have to bring them in by DHL or FedEx Air.

How did Christmas season sales work out last year (2016)? Online sales were
greater than Brick and Mortar sales for the first time ever for non-grocery
items.

Several research firms estimated that online sales from midnight,
Thanksgiving day through Midnight the following Monday, were between $3.2
Billion and $3.6 Billion. (That covers Black Friday and Cyber Monday).

However -Not all was Rosy. Total retail sales (Online + Brick & Mortar)
actually fell 4% overall for November and December combined.

Look back in your email on December 27 or 28 for an email from Amazon
Selling Coach that lists items that customers have added to their wish
lists and did not get for Christmas. (See screenshot below).

These are items people want, but did not get for gifts, and therefore, are
likely to buy for themselves.

Check out the sales rank for each item -if it's in the top 10% of the
category - try and find a wholesale source and add to your inventory.

Wow - Amazon hit some great numbers.

I just got a news release from Amazon that said: "Fulfillment by Amazon
Delivered More than 2 Billion Items for Sellers Worldwide in 2016." Some
other facts:

Sellers worldwide received orders for more than 28 million items on
Cyber Monday.

My Fulfillment Team
- Amazon FBA Fulfillment center was closed to new accounts before Christmas
because they were swamped with new business, They have just started
accepting new accounts. You can email them
here.

Jungle Scout has developed a great product checklist for private label products.
Click here
to download the PDF.

Whether you want to sell on eBay or Amazon, this seems like a very simple
question, but the answers are very complex. Why? Because it depends on so
many different factors -most of them, unique to you.

One of the most important things that will control the amount you can (and
should) invest, is the amount of free cash, or free cash flow, you have on
hand. If all the spare money you have on hand is $500 (without borrowing),
then you should invest $500 in your business.

Or, if you have $5000 in cash available -I would use $2,000 to invest
immediately in inventory to sell, and use the balance for more inventory
and other expenses, over the next three or four months as you build your
business.

Notice in the paragraph above I said: ". If all the spare money you have on
hand is $500 (without borrowing) …" The words without borrowing are the key.

When you are just starting out - no matter how much training you have -or
how many books you read -I guarantee, you will make
mistakes. Building up a few thousand dollars (pounds, Euros, Yen, etc.) on
a credit card and depending on income from your business to pay it back, is
a really bad business strategy.

Another important point: One of the things you must NOT do, is invest all
your money at once in inventory to resell. I have said many times that the
more inventory you have available to sell -the more money you will make.
That is generally true. But, it depends on having the right inventory -that
is, inventory that will sell, and not just sit in stock. Take your time
researching and building up your inventory.

NOTE: Do not buy both the Amazon and
eBay Marketing system because there is a lot of duplication in both courses.
(This also applies to
The Wholesale Buying System,
because that is already included in both the eBay and Amazon Systems).

If you plan to sell new merchandise, I would start with Amazon, as they far
outsell eBay on new products.

However, if you want to sell used or vintage items, then eBay is still the
best place. You can start with either one, and learn the other one later,
as almost all of the knowledge and techniques are transferrable between the
two sites.

In addition to training, there are several free Facebook groups where eBay
and Amazon sellers can ask questions. Just go to Facebook, open an account,
and enter eBay and/or Amazon in the search box and several groups will come
up. Go to their page and join. Then over the next week or so, see if the
group is helpful -and if not -drop it and join another group. (Note - I
will be starting my own Facebook group soon. It will be announced here in
this newsletter when it launches).

The next thing you want to consider investing in, are various third-party
services to help you run and automate your business. I am not going to
recommend specific ones here, as that is a subject that is too long and
would take its own article

As a side note - when you buy training courses, it can be tempting to keep
studying forever until you are 100% ready and everything is perfect. If you
are a perfectionist or a worry-wort, then you will never get started. One
of my favorite sayings is: Perfection is the enemy of good. My
second favorite saying is:If you want to start a business, you have tostart your business.

So yes, get some training before you start -but once you have done that
-Get started! All online businesses are such that, experience teaches you
more than you can learn in any book. So, once you know the basics, get
started so you can start getting some experience.

One of the things new sellers get hung up on is product research. (I know I
mentioned the importance of product research before, but don't get hung up
on it). These folks refuse to buy anything, unless it is a guaranteed sure
seller. Well, as someone who has sold online for 17 years, I can tell you
there is no such thing. Product research can lead you in the right
direction, but sometimes you have trust your gut -and pull the trigger! (I
do a lot of product selection by trial & error).

Another factor new sellers have to be aware of when deciding to invest, is
learning which category you can sell in and which categories are restricted
and need permission from Amazon (At this point, eBay does not have
restricted categories -but its coming soon). As long as your Amazon account
is in good standing, you can apply to sell in a restricted category. Here
is what you need to do:

When you apply, Amazon will ask for a webpage where they can see
that you have compliant product photos. You don't have to set up a
website - an eBay store will work fine

Amazon will look at your account to see if your account is in good
standing. Do you pay your seller fees on time? What is your
feedback (it should be 96% or better)? Do you answer all your
customer email within 24 hours? If you are merchant fulfilling -do
you ship on time? There are more factors. Just click on Account
Health in Seller Central and you can see all your metrics.

The last thing Amazon wants to see are 3 invoices less than 6
months old from regular wholesale suppliers in the category you are
applying for. Retail stores do not count -they must be wholesale
suppliers and the invoices must match the business name you
registered with on Amazon.

Buying products before you get approved can be a bit chancy -so
what I suggest you do is buy the products and list them on eBay
while you wait for Amazon approval.

So there is some advice regarding how much you should invest in your
business. As you can see, the answer to that question is quite subjective.

If you look at your customer returns report, you will be very surprised to see
how many of your returns, have been put back into sellable inventory. Take a
look at this screenshot from a recent returns report account.

This is for the last 30 days. As you can see, I only had 18 items returned
during this period.

A few items stand out. Look at the 3rd item on the list from
December 22nd. Under the Disposition column it says "Defective.
And in the status column, the report says "Unit returned to inventory." You
might think this is really bad -but it is not necessarily so. A lot of
Amazon customers are pretty savvy and they know that if you say an item is
defective, then Amazon will pay the return shipping (and charge the seller
for it). So there nay not be anything wrong with the item -you hope.

The problem with Amazon returning items to sellable inventory is this:

I have had situations where the customer opened the retail box -and once
inside, there was plastic wrap, or additional packaging that the customer
tore open. When they decided they did not want the item, they stuffed it
back into the retail box any way they could. When the product arrives back
at the Amazon warehouse, the warehouse worker glances at the box and says
"That looks OK to me," and he puts it back into sellable inventory.

Now, when the next customer buys the product and they are shipped the one
that was returned to inventory, they complain to Amazon that the seller
sent them a "used" item. This information gets sent to the Seller
Performance Team and they send you a nasty gram threatening your account
unless you provide a "plan" that describes the steps you are going to take
to make sure you do not sell any used goods in the future.

If you answer with anything other than the plan they ask for (such as an
explanation that you do not sell used merchandise), then at a minimum they
will kill the listing for that product, and threaten to close your selling
account if it happens again.

I wrote Amazon Seller Support about this two weeks ago and have still not
received an accurate answer. At one point, they told me to submit a removal
order. But the problem with that is that there is no way to remove a
specific item without removing the entire item. The last time I had this
issue occur, I had quite a few items in inventory of the concerned product
-and would have to remove all of them to get the specific product back.
Just today, I got an email from Amazon thanking me for my patience and
saying they were still researching the issue.

One of the most obvious ways to raise capital for your online business is
borrowing -but I am solidly against that. If you have some products that
already sell quickly and profitably -then I am OK with borrowing money to
finance that specific inventory -but I am strongly against borrowing money
to start a business.

So, what are some of the ways you can raise money for your business without
borrowing?

The first possible way that comes to mind is to seek Angel Financing from a
local -but disinterested investor. The term Angel Investor
refers to professional venture capitalists (investors) who put up small
amounts of money -typically $250,000 or less, as opposed to full Venture
Capitalists who tend to invest millions of dollars in new ventures.

OK, how do you find Venture Capitalists? In some of the larger cities,
there are actually Angel Investor groups who meet regularly. You can find
them by asking your local bankers, or checking with your local Chamber of
Commerce. Many counties in the US have business development groups. These
fellows are always tuned in, and in contact with, local Angel investors. If
you live in a small town or rural area, your local banker (business banker)
is probably your best bet.

How do investors work? An (Angel) venture investor typically gives you an
amount of money in exchange for a percentage of the business. It is not a loan -if the business fails, the investor looses
his, or her, money. There are some venture deals that involve venture debt
(a loan) but, if that is offered -I would turn it down.

The next way to finance a business is to get an investment from a family
member. I strongly advise against this. If you take an investment from a
family member, I guarantee they will want to give you constant business
advice. But, unless they are experienced online sellers - most of their
advice will be wrong. And, it won't just be business advice on major
matters -they will constantly be giving you advice on every minor detail of
running your business. This is a formula for having a nervous breakdown.

Another way to find an investor is to find either a silent partner -or a
working partner. I am generally against partnerships, for the same reason I
avoid investments from family members. Most partners want to help you run
the business, but they don't have the skills, or experience, to do so.
However, a silent partner is someone with whom you have no prior
relationship and can be completely dispassionate and disinterested in your
business. All they require is quarterly profit and loss statements.

A working partner is a completely different animal. A working
partner would be someone who, A) is an experienced online seller, and B)
wants to work actively with you in the business. This can be a great
solution as long as you work out the responsibly of each party before you
start. For example -one way is to split up the duties is by category (you
sell jewelry and accessories, and your partner sells clothing and shoes).

The real key to the success of this arrangement is, the agreement you come
to before the partnership begins. If there is any ambiguity, a partnership
could turn in to a real nightmare.

First of all, I am not recommending you finance your
business operations with credit cards. We use our credit cards to purchase
merchandise for resale, and to pay for business meals and other expenses
when on business travel, but we pay off the entire balance each month, so
there is no interest cost. Financing your business with credit (of any
kind) is highly risky until you have been in business a few years and know
100% that what you buy --will sell.

Select and use your credit cards wisely. A lot of credit cards today,
including most airline cards, offer a sign up bonus of up to 50,000 points
to get started. Plus, many of the airline cards offer a free domestic
companion trip where two fly for the price of one when flying together.

If you like to travel overseas, The American Express Platinum card offers a
free overseas companion ticket in Business or First class once a year, plus
free membership to about a dozen airline clubs both in the US and overseas.
(Just walk in, flash your platinum card, and you are in). Plus, you can use
Amex points on any airline, hotel chain or rent-a-car company.

Now the bad news: The Platinum card costs $400 a year, but that is actually
a bargain for folks who travel overseas at least once a year. If you don't
travel overseas, the regular green Amex card and the Amex Gold card are a
lot cheaper, and, even with those cards, you can use Amex points on any
airline, hotel chain or rent-a-car company. So that makes them pretty
flexible. (I have heard Citibank has a similar program which is a lot
cheaper annual fee than Amex, but I don't know the details).

Most credit cards (including airline cards) offer points when you buy
something. So, what we do when we set up wholesale accounts, is tell them
we prefer to use credit cards instead of opening a credit account. Almost
all wholesale vendors prefer this, and this way we earn points on every
purchase.

Last year we bought over $600,000 in merchandise to resell on eBay and
Amazon, so that earned us 600,000 points we could use for travel (or with
some cards to purchase merchandise).

One of my cards (a Wells Fargo Visa card) offers gift cards to hotel chains
like Hilton, Marriot and others in exchange for points. The gift cards are
typically in amounts such as $250 or $500 each. You can use those to pay
for business or personal travel.

A few tips:

Shop carefully and only pick one or two cards. You want to be able
to concentrate your points

If you use an airline card, do two things: First make sure the
airline card you pick services your city -or places you fly to
frequently.

Second - look at that airline's companion airlines. For example, I
have an Alaska Airlines card that gave me 40,000 points when I
signed up, plus a free companion ticket domestically or
internationally (economy only) once a year. Plus, their companion
airlines include Delta and American, so I can use my points on any
of those airlines and pretty much fly anywhere in the world.

When you are shopping for cards, be sure to consider both the
annual fee and the interest rate. As I said above, we payoff our
entire balance almost all of the time -although we sometimes carry
a balance near Christmas, so we can increase our inventory. But,
even then, we only use credit to purchase our top selling items,
which move really fast.

Some cards offer double points when you buy merchandise. So, shop around
and find the best deals you can find. I would list my favorites here -but
the last time I did that, I got over a hundred emails from readers telling
me about better deals. I have a policy of answering all email from readers
and customers, so sorry, but I don't want to deal with that again. Please
do your own research.

Orchids America
is a wholesaler of luxury home textiles and accessories. Their collection
consists of fine rugs, decorative pillows, contemporary duvet sets, leather
products and accessories for the home.

Classy
designs and makes a unique line of state "Home" t-shirts. They carry a
selection of state vinyl decals and tote bags. A portion of the proceeds
are donated to The Wounded Warrior Project.

The Kalamazoo Candle Company
makes and soy candles with a natural scent that will fill a room without
over powering it. Their candles are available in a variety of sizes in 25
fragrances. Use the Contact Us form to ask for wholesale information.

Annalee
sells a wide range of unusual dolls that feature character and whimsy, but
the thread that binds them together as an "Annalee" is that each and every
one of them celebrates some aspect of life

Celibri Ducks
collectible celebrity rubber ducks of the greatest icons of film, music,
athletics, and history. They are made in the USA and PVC free.

Please Note:
Some of the products and
services mentioned in this website, in articles, banner ads and
newsletters and blog posts are for products and services for which I
earn a referral fee or commission. We always evaluate anything we
recommend very carefully and each year we turn down literally dozens
of opportunities to recommend products or services where we can earn
a commission. Even though we earn a fee on some of our
recommendations, we only recommend products and services that we
feel will deliver good value and with rare exceptions, they all come
with a money back guarantee.